Personal Finance: Marx On Money & Power

Personal Finance: Marx On Money & Power

The hairy man who predicted that capitalism would cause its own downfall more than a century ago is getting a lot more attention these days. With hippies and bankers alike rioting in the streets at the G20 meetings, surely an uprising of the working class is suddenly not such a foreign concept. It was a blind faith in capitalism itself that caused much of the problems we’re still reeling from now. Even the Archbishop of Canterbury has been reminding people of some Victorian literature that warned us about making ourselves liable for the debts of our seedy acquaintances. This fault, it seems, along with accompanying blind trust in rational markets, has always been part of our world of lending and borrowing. It’s this world that’s getting a shake-up.

Now Marx, contrary to popular belief, was not against capitalism as such. He saw that it improved the quality of life of most people in the long run. In fact, he held that communism was not something that could work in countries that had not gone through a thorough stretch of infrastructure-creating capitalism themselves (and therefore didn’t advocate it for Russia). His studies of the markets and how money and value are created (and lead to power) still carry many valuable lessons. If you’re looking to make money in this climate, you’re going to have to heed the warnings of bearded uncle Karl, or suffer his predicted disastrous consequences. Let’s look at what we can learn from the angry oracle about securing personal wealth and power.

Own the means of production

Right at the core of Marxist thinking and capitalism is that those who own the means of production have the power. They make the money. You’re either being paid a basic wage or you’re employing other people and machines to make you rich. Look at Amazon.com and its Kindle taking on the book market or American Apparel allowing others to utilize its production chain, and you’ll get an idea of what Marx was on about.

A new technological innovation can lead to new means of production. Be on the lookout. Alternatively, by purchasing shares in companies that own the productive means, you too can become an owner.

Respect the proletariat

The above could be rephrased “read Dilbert”. Only a very small — and very strange — percentage of the population dream of spending their young lives in fabric-covered cubicles staring at computer screens. It’s important as a capitalist mogul that you never forget this. The workers are there for the money. Many companies winning “best company to work for” polls partly address this issue by getting their worker bees involved in their Corporate Social Responsibility schemes: If people can see how they make a difference, and how they are themselves making a meaningful contribution to society, this adds meaning and purpose to work that isn’t there when motives are purely profit-driven.

What other personal finance tips can you learn from Karl Marx? Find out next...